The  Economic  Theory 

OF  A 

Legal  Minimum  Wage 


By 

Sidney  Webb 


Reprinted  from  The  Journal  of  Political  Economy, 
University  of  Chicago  Press,  December  1912,  by  the 


NATIONAL  CONSUMERS’  LEAGUE 

106  East  19TH  Street 

New  York 


Digitized  by  the  Internet  Archive 
in  2017  with  funding  from 

University  of  Illinois  Urbana-Champaign  Alternates 


https://archive.org/details/economictheoryofOOwebb 


33  \.X 

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The  Economic  Theory  of  a  Legal  Minimum  Wage 


The  fixing  of  a  Minimum  Wage  by  law — making  it  a  penal 
offense  to  hire  labor  at  a  lower  rate  than  that  fixed  by  the  law — 
is  now  an  accomplished  fact,  of  which  the  world  has  had  half  a 
generation  of  experience.  In  this  matter  of  the  Legal  Minimum 
Wage  the  sixteen  years’  actual  trial  by  Victoria  is  full  of  instruc¬ 
tion.  Victoria,  which  is  a  highly  developed  industrial  State,  of 
great  and  growing  prosperity,  had  long  had  Factory  Laws,  much 
after  the  English  fashion.  In  1896,  largely  out  of  humanitarian 
feeling  for  five  specially  “sweated”  trades,  provision  was  made  for 
the  enforcement  in  those  trades  of  a  Legal  Minimum  Wage. 
Naturally  this  was  opposed  by  all  the  arguments  with  which  we  are 
familiar — that  it  was  “against  the  laws  of  Political  Economy,” 
that  it  would  cause  the  most  hardly  pressed  businesses  to  shut  down, 
that  it  would  restrict  employment,  that  it  would  drive  away  Capital, 
that  it  would  be  cruel  to  the  aged  worker  and  the  poor  widow,  that 
it  could  not  be  carried  out  in  practice,  and  so  on  and  so  forth. 
Naturally,  too,  all  sorts  of  criticisms  have  since  been  leveled  at  the 
administration  and  working  of  the  law;  and  over  and  over  again 
eager  opponents,  both  in  England  and  on  the  spot,  have  hastened 
to  report  that  it  had  broken  down.  But  what  had  been  the  result? 
In  the  five  sweated  trades  to  which  the  law  was  first  applied  sixteen 
years  ago,  wages  have  gone  up  from  12  to  35  per  cent,  the  hours 
of  labor  have  invariably  been  reduced,  and  the  actual  number  of 
persons  employed,  far  from  falling,  has  in  all  cases,  relatively  to 
the  total  population,  greatly  increased.  Thus  the  Legal  Minimum 
Wage  does  not  necessarily  spell  ruin,  either  for  the  employers  or 
for  the  operatives.  But,  of  course,  it  is  open  to  any  theorist  to  urge 
that  we  do  not  know  how  much  better  off  these  trades  might  have 
been  without  the  Act.  The  only  test  here  is  what  the  people  say 
who  are  directly  concerned,  who  see  with  their  own  eyes  the  law 
actually  at  work,  and  who  are  forced  daily  to  compare  the  trades 
to  which  it  applies  with  those  to  which  it  does  not  apply.  First, 
let  us  notice  that  the  Act  of  1896  (like  the  British  Trade  Boards 
Act  of  1909)  was  only  a  temporary  one.  It  has  during  the  past 


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sixteen  years  been  incessantly  discussed;  it  has  been  over  and  over 
again  made  the  subject  of  special  inquiry;  it  has  been  repeatedly 
considered  by  the  Legislature;  and,  as  a  result,  it  has  been  five 
successive  times  renewed  by  consent  of  both  Houses.  Can  it  be 
that  all  this  is  a  mistake?  Still  more  convincing,  however,  are  the 
continuous  demands  from  the  other  trades,  as  they  witnessed  the 
actual  results  of  the  Legal  Minimum  Wage  where  it  was  in  force, 
to  be  brought  under  the  same  law. 

Provision  is  made  for  this  extension  by  resolutions  which  have 
to  be  passed  by  both  Houses  of  the  Legislature.  The  first  trades 
to  which  the  law  was  applied  were  those  of  bootmaking  and  baking 
(employing  mainly  men),  clothing,  shirts,  and  underclothing 
(employing  mainly  women),  and  the  very  troublesome  furniture 
trade,  in  which  the  Chinese  had  gained  a  secure  footing.  It 
naturally  took  some  time  to  get  the  law  to  work,  to  overcome  the 
inevitable  difficulties  and  to  demonstrate  any  results.  Accordingly 
for  four  years  there  was  no  extension.  In  1900,  however,  we  had 
the  brickmakers  coming  in,  and  the  butchers,  the  cigar  makers 
and  the  confectioners,  the  coopers  and  the  engravers,  the  fell- 
mongers,  the  jewelers,  and  the  jam  trade,  the  makers  of  millet 
brooms  and  the  pastrycooks,  the  plateglass  manufacturers  and  the 
potters,  the  saddlers  and  the  tanners,  the  tinsmiths  and  the  wood¬ 
workers,  the  woolen  manufacturers  and,  perhaps  most  significant 
of  all,  the  strongly  organized  printers,  including  the  compositors 
in  the  great  newspaper  offices.  In  the  following  year  (1901),  so 
far  from  there  being  any  signs  of  repentance,  there  was  an  equal 
rush  of  extensions  of  the  law  to  industries  of  all  kinds — the  aerated 
water  makers  and  the  manufacturers  of  artificial  manure,  the  brass- 
workers  and  the  bedstead  makers,  the  brewers  and  the  brush- 
workers,  the  ironmoulders  and  the  makers  of  leather  goods,  the 
malsters  and  the  ovenmakers,  the  stonecutters  and  the  workers 
in  wicker.  For  three  years  there  was  then  a  pause,  the  Legal 
Minimum  Wage  being  only  demanded  by  and  extended  to  the  dress¬ 
makers  in  1903.  In  1906  came  another  rush  of  trades,  the  agri¬ 
cultural  implement  makers,  the  cardboard  box  makers,  the  candle 
makers,  the  cycle  trade,  the  farriers  and  the  flour  millers,  the 
milliners  and  the  paper  bag  makers,  the  manufacturers  of  starch, 
soap,  and  soda,  and  the  makers  of  waterproof  clothing.  In  the 
following  year  (1907),  only  the  glassworkers  and  the  picture  frame 
makers  came  in.  The  year  1908  saw  the  application  of  the  law 
to  the  bread  carters,  the  hairdressers,  the  manufacturers  of  ice 


4 


and  the  wireworkers.  In  1909  it  was  extended  to  the  carpenters, 
the  carriage  builders,  the  carters,  the  drapers,  the  electro-platers, 
the  grocers,  the  ham  and  bacon  curers,  the  dealers  in  coal,  wood, 
hay,  and  chaff,  the  makers  of  men’s  clothing,  the  organ  builders,  the 
painters,  the  manufacturers  of  polish,  the  plumbers,  the  quarrymen, 
the  makers  of  rubber  goods,  and  that  mysterious  craft  the  tuck- 
pointers.  During  1910  there  came  in  the  boiler  makers,  the  boot¬ 
makers,  the  brick-layers,  the  coal  miners,  the  electrical  engineers, 
the  factory  and  mining  engine  drivers,  the  gold  miners,  the  hard¬ 
ware  makers  and  the  hotel  employees,  the  marine-store  dealers, 
the  plasterers,  the  stationers,  the  teapackers,  the  tilers,  the  watch¬ 
makers,  the  slaughterers  for  export,  the  undertakers  and  even  the 
lift  attendants.  What  occupations  were  left  to  come  in  during 
1911  and  1912  I  do  not  yet  know. 

Now,  in  this  remarkable  popular  demonstration  of  the  success 
of  the  Act,  tested  by  the  not  inconsiderable  period  of  sixteen  years, 
extending  over  years  of  relative  trade  depression  as  well  as  over 
years  of  boom,  some  features  deserve  mention.  First,  the  exten¬ 
sions  have  frequently — indeed,  it  may  be  said  usually — taken  place 
at  the  request,  or  with  the  willing  acquiescence,  of  the  employers 
in  a  trade,  as  well  as  of  the  wage  earners.  What  the  employers 
appreciate  is,  as  they  have  themselves  told  me,  the  very  fact,  that 
the  Minimum  Wage  is  fixed  by  law  and  therefore  really  forced 
on  all  employers:  the  security  that  the  Act  accordingly  gives  them 
against  being  undercut  by  the  dishonest  or  disloyal  competitors, 
#  who  simply  will  not  (in  Victoria  as  in  the  Port  of  London)  adhere 
to  the  Common  Rules  agreed  upon  by  Collective  Bargaining.  We 
must  notice,  too,  that  the  application  of  the  law  has  been  demanded 
by  skilled  trades  as  well  as  by  unskilled,  by  men  as  well  as  by  women, 
by  highly  paid  craftsmen  and  by  sweated  workers,  by  the  strongly 
organized  trades  as  well  as  by  those  having  no  Unions  at  all.  One 
is  tempted,  indeed,  to  believe  that  little  remains  now  outside  its 
scope  except  the  agricultural  occupations  and  domestic  service ! 
Nor  can  it  be  said  to  be  confined  to  industries  enjoying  a  protective 
tariff,  for  there  are  no  import  duties  to  shield  the  gold  miners,  or 
the  quarrymen,  or  the  slaughterers  for  export;  and  no  fiscal  pro¬ 
tection  helps  the  carters  or  the  butchers,  the  drapers’  assistants  or 
the  engine  drivers,  the  newspaper  printers  or  the  potters,  the  grocers 
or  the  hairdressers,  the  hotel  employees  or  the  lift  attendants. 
And  it  is  difficult  to  believe  that  the  enforcement  of  a  Legal  Mini¬ 
mum  Wage  in  all  these  hundred  different  industries,  employing 


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110,000  persons  (being,  with  their  families,  more  than  a  quarter  of 
the  entire  population  of  the  State),  has  interfered  with  the  profit¬ 
ableness  of  industry,  when  the  number  of  factories  has  increased, 
in  the  sixteen  years,  by  no  less  than  60  per  cent,  and  the  numbers  of 
workers  in  them  have  more  than  doubled.  Certainly,  no  statesman, 
no  economist,  no  political  party  nor  any  responsible  newspaper  of 
Victoria,  however  much  a  critic  of  details,  ever  dreams  now  of 
undoing  the  Minimum  Wage  Law  itself. 

But  turning,  now,  from  actual  experience  of  the  working  of  a 
Legal  Minimum  Wage,  to  abstract  economic  theory,  we  must  first 
get  clearly  before  us  the  distinction  between  the  fixing  and  enforcing 
of  a  Minimum,  and  the  fixing  and  enforcing  of  a  wage.  What  is 
here  in  question  (as  in  all  factory  legislation)  is  a  Minimum,  not 
a  Maximum — still  less  any  actual  decision  that  the  wage  shall  be 
such  or  such  sum.  It  ought  not  to  be  necessary  to  point  this  out. 
But  the  ignorance  and  stupidity  of  people  calling  themselves  edu¬ 
cated  is,  in  this  matter,  beyond  all  belief.  Nearly  every  day  I  am 
told,  or  I  read,  that  this  Minimum  Wage  legislation  is  merely  a 
revival  of  the  mediaeval  fixing  of  wages  by  the  Justices  of  the  Peace, 
or  the  eighteenth-century  fixing  of  wages  by  the  Tailors’  Acts  or 
the  Spitalfields  Weavers  Acts,  which  had,  it  is  asserted,  such  dis¬ 
astrous  consequences.  I  wonder  how  long  it  will  take  before  such 
people  (economists,  I  am  afraid,  not  wholly  excluded)  will  realize 
that  they  are,  in  making  such  statements,  simply  making  fools  of 
themselves,  revealing  an  ignorance  of  the  subject  so  abysmal  as 
to  put  themselves  beyond  the  pale.  The  ancient  legislation  to 
which  they  refer,  by  definitely  prescribing  the  actual  rates  to  be 
paid,  fixed  maximum  wages,  not  merely  a  minimum.  There  is  no 
sort  of  resemblance  or  analogy  between  prescribing  that  the  work¬ 
people  shall  under  no  circumstances  get  more  than  a  specified  rate, 
and  merely  enacting  that  they  shall  under  no  circumstances  get 
less.  The  whole  economic  and  social  consequences  and  results 
of  the  two  types  of  legislation,  and  their  effects  on  employers  and 
on  industry,  are  as  different  as  chalk  is  from  cheese. 

The  principal  question  for  the  economist  to  consider  is  how  the 
adoption  and  enforcement  of  a  definite  minimum  of  wages  in  par¬ 
ticular  trades  is  likely  to  affect,  both  immediately  and  in  the  long 
run,  the  productivity  of  those  trades,  and  of  the  nation’s  industry 
as  a  whole. 

Now  upon  this  point  the  verdict  of  economic  theory,  whatever 
it  may  be  worth,  is,  I  submit,  emphatic  and  clear.  To  the  modern 


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economist  there  seems  nothing  in  the  device  of  a  legal  minimum  of 
wages,  especially  where  (as  would  in  the  great  majority  of  trades 
be  the  case)  it  takes  the  form  of  a  Standard  Piecework  List,  that  is 
in  any  way  calculated  to  diminish  productivity.  On  the  contrary, 
all  experience,  as  well  as  all  theory,  seems  to  show  that,  as  com¬ 
pared  with  no  regulation  of  wages,  or  with  leaving  the  employer 
free  to  deal  individually  with  each  operative,  it  must  tend  actually 
to  increase  the  productivity  of  the  industry.  Here  we  have,  in 
fact,  the  lesson  of  actual  experience  from  a  whole  century  of  indus¬ 
trial  history.  It  is  only  necessary  to  watch  the  operation,  in  trade 
after  trade,  of  analogous  Common  Rules,  many  of  them  enforced 
by  law.  These  Common  Rules,  like  the  Legal  Minimum  Wage, 
are  always  minima,  not  maxima.  Every  employer  naturally  pre¬ 
fers  to  be  free  to  do  whatever  he  chooses;  to  compete  in  anyway 
he  pleases,  on  the  downward  way  as  well  as  on  the  upward  way. 
But  the  enforcement  in  any  industry,  whether  by  law  or  by  public 
opinion,  or  by  strong  Trade  Unionism,  of  a  Standard  Rate,  a  Normal 
Day  and  prescribed  conditions  of  sanitation  and  safety,  does  not 
prevent  the  employer’s  choice  of  one  man  rather  than  another,  or 
forbid  him  to  pick,  out  of  the  crowd  of  applicants,  the  strongest, 
the  most  skillful,  or  the  best  conducted  workman.  The  universal 
enforcement  of  a  Legal  Minimum  Wage  in  no  way  abolishes  compe¬ 
tition  for  employment.  It  does  not  even  limit  the  intensity  of  such 
competition,  or  the  freedom  of  the  employer  to  take  advantage 
of  it.  All  that  it  does  is  to  transfer  the  pressure  from  one  element 
in  the  bargain  to  the  other:  from  the  wage  to  the  work,  from  price 
to  quality.  In  fact,  this  exclusion  from  influence  on  the  contract 
of  all  degradation  of  price,  whether  it  takes  the  form  of  lower  rates 
of  wages,  longer  hours  of  labor,  or  worse  conditions  of  sanitation 
and  safety,  necessarily  heightens  the  relative  influence  on  the  con¬ 
tract  of  all  the  elements  that  are  left.  If  the  conditions  of  employ¬ 
ment  are  unregulated,  it  will  frequently  “pay”  an  employer  (though 
it  does  not  pay  the  community  for  him  to  do  so)  not  to  select  the 
best  workman,  but  to  give  the  preference  to  an  incompetent  or  infirm 
man,  a  “boozer”  or  a  person  of  bad  character,  provided  that  he 
can  hire  him  at  a  sufficiently  low  wage,  make  him  work  excessive 
and  irregular  hours,  or  subject  him  to  insanitary  or  dangerous  con¬ 
ditions.  In  short,  the  employer  may  (in  the  absence  of  definitely 
fixed  minimum  conditions)  make  more  profit,  though  less  product, 
out  of  inefficient  workmen  than  out  of  good  workmen.  With  a 
Legal  Minimum  Wage,  and  with  similarly  fixed  hours  and  sanitary 


conditions,  this  frequent  lowering  of  productivity  is  prevented.  If 
the  employer  cannot  go  below  a  common  minimum  rate,  and  is 
unable  to  grade  the  other  conditions  of  employment  down  to  the 
level  of  the  lowest  and  most  necessitous  wage  earner  in  his  estab¬ 
lishment,  he  is  economically  impelled  to  do  his  utmost  to  raise  the 
level  of  efficiency  of  his  workers,  so  as  to  get  the  best  possible  return 
for  the  fixed  conditions. 

This  is  the  basis  of  the  oft-repeated  accusation  brought  by  the 
sentimental  lady  or  charity  worker  against  the  Trade  Union  Stand¬ 
ard  Rate,  and  now,  in  England,  by  foolish  persons  against  the 
Workmen’s  Compensation  Act,  that  it  prevents  an  employer  from 
preferentially  selecting  an  old  man,  or  a  physical  or  moral  invalid, 
when  there  is  a  vacancy  to  be  filled.  But  it  is  clear  that  the  aggre¬ 
gate  efficiency  of  the  nation’s  industry  is  promoted  by  every  situation 
being  filled  by  the  best  available  candidate.  If  the  old  man  is 
engaged  instead  of  the  man  in  the  prime  of  life,  because  he  can 
be  hired  at  a  lower  rate,  the  man  of  irregular  habits  rather  than 
the  steady  worker,  because  the  former  is  prepared  to  take  smaller 
wages,  there  is  a  clear  loss  all  round.  From  the  point  of  view  of 
the  economist,  concerned  to  secure  the  highest  efficiency  of  the 
national  industry,  it  must  be  counted  to  the  credit  of  the  Legal 
Minimum  Wage  that  it  compels  the  employer,  in  his  choice  of  men  to 
fill  vacancies,  seeing  that  he  cannot  get  a  “cheap  hand,”  for  the  price 
that  he  has  to  pay,  to  be  always  striving  to  exact  greater  strength 
and  skill,  a  higher  standard  of  sobriety  and  regular  attendance,  and 
a  superior  capacity  for  responsibility  and  initiative.  This  is  exactly 
what  has  happened  in  Victoria  under  the  Minimum  Wage  Law, 
as  it  has  happened  in  Great  Britain  where  a  definitely  fixed  mini¬ 
mum  has  been  substituted  for  the  irregular  competitive  rates,  which, 
in  the  absence  of  a  Common  Rule,  the  sharp  or  “cutting”  employer 
can  enforce  on  the  weakest  or  most  necessitous  workers.  Thus, 
a  Legal  Minimum  Wage  positively  increases  the  productivity  of 
the  nation’s  industry,  by  ensuring  that  the  surplus  of  unemployed 
workmen  shall  be  exclusively  the  least  efficient  workmen;  or  to 
put  it  in  another  way,  by  ensuring  that  all  the  situations  shall  be 
filled  by  the  most  efficient  operatives  who  are  available.  This 
is  plainly  not  the  case  under  “free  competition”  where  there  is 
no  fixed  minimum. 

But  the  enforcement  of  a  Legal  Minimum  Wage  does  more  than 
act  as  a  perpetual  stimulus  to  the  selection  of  the  fittest  men  for 
employment.  The  fact  that  the  employer’s  mind — no  longer  able 


8 


to  seek  profit  by  “nibbling”  at  wages — is  constantly  intent  on 
getting  the  best  possible  workmen,  silently  and  imperceptibly 
reacts  on  the  wage  earners.  The  young  workman,  knowing  that  X 
he  cannot  secure  a  preference  for  employment  by  offering  to  put 
up  with  worse  conditions  than  the  standard,  seeks  to  commend  him¬ 
self  by  a  good  character,  technical  skill,  and  general  intelligence. 
Under  a  Legal  Minimum  Wage  there  is  secured  what  under  per¬ 
fectly  free  competition  is  not  secured,  not  only  a  constant  selec¬ 
tion  of  the  most  efficient  but  also  a  positive  stimulus  to  the  whole 
class  to  become  more  and  more  efficient.  It  is  unnecessary  here 
to  dwell  on  the  enormous  moral  advantage  of  such  a  permanently 
acting,  all-pervasive  influence  on  character.  But  this,  too,  has  an 
economic  value,  in  increasing  productivity. 

So  far  we  have  considered  merely  the  effect  upon  productivity 
of  enforcing  a  Minimum  Wage,  quite  irrespective  of  this  involving  a 
positive  increase  of  wages.  But  to  enforce  a  minimum  is  actually 
to  raise  the  wages  of,  at  any  rate,  some  of  the  worst  paid  operatives. 

We  have,  therefore,  to  consider  also  the  effect  on  the  living  human 
being  of  the  more  adequate  wages  that  the  enforcement  of  a  legal 
minimum  would  involve  in  the  lowest  grades.  If  unrestricted 
individual  competition  among  the  wage  earners  resulted  in  the 
universal  prevalence  of  a  high  standard  of  physical  and  mental 
activity,  it  would  be  difficult  to  argue  that  a  mere  improvement  of 
sanitation,  a  mere  shortening  of  the  hours  of  labor,  or  a  mere  in¬ 
crease  in  the  amount  of  food  and  clothing  obtained  by  the  workers 
or  their  families,  would  of  itself  increase  their  industrial  efficiency. 

But  such  ideal  conditions  are  far  from  prevailing  in  any  country. 

In  the  United  Kingdom  at  least  eight  millions  of  the  population — 
over  one  million  of  them,  as  Mr.  Charles  Booth  tells  us,  in  London 
alone — are  at  the  present  time  existing  under  conditions  represented 
by  family  earnings  of  less  than  five  dollars  a  week.  It  is  notorious 
that  even  in  the  United  States  there  are  millions  of  families  unable 
to  earn  regularly  throughout  the  whole  year  as  much  as  ten  dollars 
a  week:  a  sum  which  does  not  afford,  at  present  prices,  in  the  slums 
of  New  York  or  Chicago,  Pittsburgh  or  Cincinnati,  enough  for  a 
physiologically  healthy  existence.  The  unskilled,  and  especially 
the  casually  hired  laborer,  who  is  inadequately  fed,  whose  clothing 
is  scanty  and  inappropriate  to  the  season,  who  lives  with  his  wife 
and  children  in  a  single  room  in  a  slum  tenement,  and  whose  spirit 
is  broken  by  the  ever-recurring  irregularity  of  employment,  cannot 
by  any  incentive  be  stimulated  to  much  greater  intensity  of  effort, 


9 


for  the  simple  reason  that  his  method  of  life  makes  him  incapable 
of  either  the  physical  or  mental  energy  that  would  be  involved. 
Even  the  average  mechanic  or  factory  operative,  who  earns  in  the 
United  Kingdom  from  five  to  ten  dollars  a  week,  seldom  obtains 
enough  nourishing  food,  an  adequate  amount  of  sleep,  or  sufficiently 
comfortable  surroundings  to  allow  him  to  put  forth  the  full  physical 
and  mental  energy  of  which  his  frame  is  capable.  The  cool  observer 
of  the  conditions  of  life  of  that  half  of  the  American  people  who 
have  to  live  on  family  earnings  that  do  not  exceed  five  hundred 
dollars  in  a  year,  cannot  refrain  from  placing  them  in  the  same 
case.  No  “intellectual”  who  has  lived  for  any  length  of  time  in 
households  of  typical  factory  operatives  or  artisans  in  England 
or  in  the  United  States,  can  have  failed  to  become  painfully  aware 
of  their  far  lower  standard  of  nutrition,  clothing,  and  rest  than  his 
own,  and  also  of  their  lower  standard  of  vitality  and  physical  and 
mental  exertion.  It  has  accordingly  been  pointed  out  by  many 
economists,  from  J.  R.  M’Culloch  to  Alfred  Marshall,  that,  at  any 
rate  so  far  as  the  weakest  and  most  necessitous  workers  are  con¬ 
cerned,  improved  conditions  of  employment  bring  with  them  a 
positive  increase  of  production.  “A  rise  in  the  Standard  of  Life 
for  the  whole  population,”  we  are  expressly  told,  “will  much  increase 
the  National  Dividend,  and  the  share  of  it  which  accrues  to  each 
trade.”  We  see,  therefore,  that  a  Legal  Minimum  Wage,  so  far 
as  the  wage  earner  is  concerned,  is  calculated — at  any  rate  if  it  takes 
the  form  of  a  Standard  Piecework  List — to  promote  the  action 
of  both  forces  of  evolutionary  progress;  it  tends  constantly  to  the 
selection  of  the  fittest,  and  at  the  same  time  provides  both  the  mental 
stimulus  and  the  material  conditions  necessary  for  functional  adapta¬ 
tion  to  a  higher  level  of  skill  and  energy. 

But  we  have  got  into  the  habit  of  thinking  that  the  productivity 
of  industry  depends  more  upon  the  efficiency  of  the  brains  and 
machinery  employed,  than  upon  the  quality  of  the  manual  laborers. 
Let  us,  therefore,  consider  the  probable  effects  of  a  Legal  Minimum 
Wage  upon  the  brain-workers,  including  under  this  term  all  who 
are  concerned  in  the  direction  of  industry.  Here  the  actual  expe¬ 
rience  of  the  Factory  Acts  and  of  strong  Trade  Unionism  is  very 
instructive.  When  all  the  employers  in  a  trade  find  themselves 
precluded,  by  the  existence  of  a  Common  Rule,  from  worsening 
the  conditions  of  employment — when,  for  instance,  they  are  legally 
prohibited  from  crowding  more  operatives  into  their  mills  or  keeping 
them  at  work  for  longer  hours,  or,  when  they  find  it  impossible, 


10 


owing  to  a  strictly  enforced  piecework  list,  to  nibble  at  wages — 
they  are  driven  in  their  competitive  struggle  with  each  other,  to 
seek  advantage  in  other  ways.  We  arrive,  therefore,  at  the  unex¬ 
pected  result  that  the  enforcement  of  definite  minimum  conditions 
of  employment  as  compared  with  a  state  of  absolute  freedom  to 
the  employer  to  do  as  he  likes,  positively  stimulates  the  invention 
and  adoption  of  new  processes  of  manufacture.  This  is  no  new 
paradox,  but  has  been  repeatedly  remarked  by  the  opponents  of 
Trade  Unionism.  Thus  Babbage,  in  1832,  described  in  detail 
how  the  invention  and  adoption  of  new  methods  of  forging  and 
welding  gun-barrels  was  directly  caused  by  the  combined  insistence 
on  better  conditions  of  employment  by  all  the  workmen  engaged 
in  the  old  process. 

In  this  difficulty  [he  says]  the  contractors  resorted  to  a  mode  of  welding 
the  gun-barrel  according  to  a  plan  for  which  a  patent  had  been  taken  out  by 
them  some  years  before  the  event.  It  had  not  then  succeeded  so  well  as  to  come 
into  general  use,  in  consequence  of  the  cheapness  of  the  usual  mode  of  welding  by 
hand  labour ,  combined  with  some  other  difficulties  with  which  the  patentee  had 
to  contend.  But  the  stimulus  produced  by  the  combination  of  the  workmen  for 
this  advance  of  wages  induced  him  to  make  a  few  trials,  and  he  was  enabled 
to  introduce  such  a  facility  in  welding  gun-barrels  by  roller,  and  such  perfec¬ 
tion  in  the  work  itself,  that  in  all  probability  very  few  will  in  future  be  welded 
by  hand  labour.  Similar  examples  [continues  Babbage]  must  have  presented 
themselves  to  those  who  are  familiar  with  the  details  of  our  manufactories, 
but  these  are  sufficient  to  illustrate  one  of  the  results  of  combinations.  .  .  . 

It  is  quite  evident  that  they  have  all  this  tendency;  it  is  also  certain  that  con¬ 
siderable  stimulus  must  be  applied  to  induce  a  man  to  contrive  a  new  and  expen¬ 
sive  process;  and  that  in  both  these  cases  unless  the  fear  of  pecuniary  loss  had 
acted  powerfully  the  improvement  would  not  have  been  made. 

The  Lancashire  cotton  trade  supplied  the  same  generation  with 
a  classic  instance  of  “Trade  Union  folly”  of  this  kind.  Almost 
every  contemporary  observer  declares  that  the  adoption  of  the 
“self-acting”  mule  was  a  direct  result  of  the  repeated  strikes  of  the 
cotton  spinners,  between  1829  and  1836,  to  enforce  their  Standard 
Piecework  Lists,  and  that  many  other  improvements  in  this  industry 
sprang  from  the  same  stimulus.  The  Edinburgh  Review  went  so 
far  as  to  say,  in  1835,  that  “if  from  the  discovery  of  the  spinning 
frame  up  to  the  present,  wages  had  remained  at  a  level,  and  workers’ 
coalitions  and  strikes  had  remained  unknown,  we  can  without 
exaggeration  assert  that  the  industry  would  not  have  made  half  the 
progress.”  And,  coming  down  to  our  own  day,  I  have  myself 
had  the  experience  of  being  conducted  over  a  huge  steel  works  in 


ll 


Scotland  by  the  late  Sir  Charles  Tennant,  one  of  the  ablest  and 
most  successful  of  our  captains  of  industry,  and  being  shown  one 
improvement  after  another,  which  had  been  devised  and  adopted 
expressly  because  the  workmen  engaged  at  the  old  processes  had, 
through  their  powerful  Trade  Unions,  enforced  a  definite  minimum 
standard  wage.  To  the  old  economist,  accustomed  to  the  handi¬ 
craftsman’s  blind  hostility  to  machinery,  this  insistence  on  a  uniform 
minimum  Standard  Rate  seemed  a  proof  of  the  shortsightedness 
of  Trade  Union  action.  The  modern  student  perceives  that  the 
Trade  Unions,  in  fighting  for  better  conditions  of  employment  than 
would  have  been  yielded  by  individual  bargaining,  and,  in  parti¬ 
cular,  for  a  compulsory  minimum,  were  building  “better  than  they 
knew.”  To  the  wage  earners  as  a  class  it  is  of  the  utmost  importance 
that  the  other  factors  in  production — capital  and  brain  power — 
should  always  be  working  at  their  highest  possible  efficiency,  in 
order  that  the  common  product,  on  which  wages  no  less  than  profits 
depend,  may  be  as  large  as  possible.  The  enforcement  of  the 
Common  Rule  on  all  establishments  concentrates  the  pressure 
of  competition  on  the  brains  of  the  employers,  and  keeps  them 
always  on  the  stretch.  “Mankind,”  says  Emerson,  “is  as  lazy 
as  it  dares  to  be,”  and  so  long  as  an  employer  can  meet  the  pressure 
of  the  wholesale  trader,  or  of  foreign  competition,  by  nibbling  at 
wages  or  “cribbing  time,”  he  is  not  likely  to  undertake  the  “intol¬ 
erable  toil  of  thought”  that  would  be  required  to  discover  a  genuine 
improvement  in  the  productive  process,  or  even,  as  Babbage  can¬ 
didly  admits,  to  introduce  improvements  that  have  already  been 
invented.  Hence  the  mere  existence  of  a  Legal  Minimum  Wage, 
by  debarring  the  hardpressed  employer  from  the  most  obvious 
form  of  relief — one  which  is  of  no  advantage  to  the  community — 
positively  drives  him  to  other  means  of  lowering  the  costs  of  pro¬ 
duction,  which  almost  inevitably  take  the  form  of  increasing 
productivity. 

But  this  is  not  all.  Besides  its  direct  effect  in  stimulating  all 
the  employers,  the  mere  existence  of  a  Legal  Minimum  Wage  has 
another  and  an  even  more  important  result  on  the  efficiency  of 
industry,  in  that  it  tends  steadily  to  drive  business  into  those  estab¬ 
lishments  which  are  most  favorably  situated,  best  equipped,  and 
managed  with  the  greatest  ability,  and  to  eliminate  the  incom¬ 
petent  or  old-fashioned  employer.  This  fact,  patent  to  the  prac¬ 
tical  man,  was  not  observed  by  the  older  economists.  Misled 
by  their  figment  of  the  equality  of  profits,  they  seemed  habitually 


12 


to  have  assumed  that  an  all-round  increase  in  the  cost  of  produc¬ 
tion  would  be  equally  injurious  to  all  the  employers  in  the  trade. 
The  modern  student  at  once  recognizes  that  a  Legal  Minimum 
Wage,  enforced  •  throughout  any  trade,  must  from  its  very  nature, 
always  fail  to  get  at  the  equivalent  of  all  differential  advantages 
of  productive  agents  above  the  level  of  the  worst  actually  employed 
by  the  community  at  any  given  time.  When,  for  instance,  the 
Amalgamated  Association  of  Operative  Cotton  Spinners  in  England 
secures  uniform  piecework  lists,  identical  hours  of  labor,  and  similar 
precautions  against  accident  and  disease  in  all  English  cotton  mills, 
it  in  no  way  encroaches  upon  the  extra  profits,  over  and  above 
those  of  the  worst  mill,  which  are  earned  by  firms  of  long  standing 
reputation  for  quality,  exceptional  commercial  skill,  or  technical 
capacity.  Similarly,  it  does  nothing  to  deprive  mills  enjoying 
a  special  convenience  of  site,  the  newest  and  best  machinery,  val¬ 
uable  patent  rights  or  trade  connections,  of  the  exceptional  profits 
due  to  these  advantages.  The  result  is  a  steady  elimination  of 
the  inferior  establishments,  and  a  constant  tendency  for  the  whole 
industry  to  be  carried  on  under  the  most  advantageous  conditions. 
This,  of  course,  from  the  standpoint  of  the  economist  concerned 
for  the  utmost  possible  productivity,  is  all  to  the  good. 

Thus,  the  probable  effect  of  a  Legal  Minimum  Wage  on  the 
organization  of  industry,  like  its  effect  on  the  manual  laborer  and 
the  brain-working  manager  or  entrepreneur,  is  all  in  the  direction 
of  increasing  efficiency.  Its  effect  on  the  personal  character  of  the 
operative  is  in  the  right  direction.  It  in  no  way  abolishes  compe¬ 
tition,  or  lessens  its  intensity.  What  it  does  is  perpetually  to 
stimulate  the  selection,  for  the  nation’s  business,  of  the  most  efficient 
workmen,  the  best-equipped  employers,  and  the  most  advantage¬ 
ous  forms  of  industry.  It  in  no  way  deteriorates  any  of  the  factors 
of  production;  on  the  contrary,  its  influence  acts  as  a  constant 
incentive  to  the  further  improvement  of  the  manual  laborers,  the 
machinery,  and  the  organizing  ability  used  in  industry.  In  short, 
whether  with  regard  to  labor  or  capital,  invention  or  organizing 
ability,  the  mere  existence  of  a  Legal  Minimum  Wage  in  any  industry 
promotes  alike  the  selection  of  the  most  efficient  factors  of  produc¬ 
tion,  their  progressive  functional  adaptation  to  a  higher  level,  and 
their  combination  in  the  most  advanced  type  of  industrial  organ¬ 
ization.  And  these  results  are  permanent  and  cumulative.  How¬ 
ever  slight  may  be  the  effect  upon  the  character  or  physical  efficiency 
of  the  wage  earner  or  the  employer;  however  gradual  may  be  the 


13 


improvement  in  processes  or  in  the  organization  of  the  industry, 
these  results  endure  and  go  on  intensifying  themselves,  so  that 
the  smallest  step  forward  becomes,  in  time,  an  advance  of  the  utmost 
importance.  I  do  not  see  how  any  instructed  economist  can  doubt, 
in  the  face  of  economic  theory  on  the  one  hand,  and  of  the  ascer¬ 
tained  experience  of  Victoria  and  Great  Britain  on  the  other,  that 
the  enactment  and  enforcement  of  a  Legal  Minimum  Wage,  like 
that  of  an  ordinary  Factory  Law,  positively  increases  the 
productivity  of  industry. 

Now,  at  this  point,  I  ought  perhaps  to  deal  with  the  bogey  of 
foreign  competition,  and  the  possible  loss  of  our  trade  to  rivals 
who  are  free  to  make  their  industry  less  efficient  than  our  own. 
But  as  I  cannot  deal  with  everything  in  this  short  paper,  I  must 
perforce  omit  the  economics  of  international  trade.  But  if  the 
result  of  a  Legal  Minimum  Wage  would  be,  as  I  have  shown,  to 
make  our  industry  steadily  more  efficient  and  more  productive, 
I  need  not  waste  time  in  demonstrating  that  this  cannot  put  us  at 
any  disadvantage  in  our  competition  with  the  foreigner.  Nations 
do  not  lose  their  trade  because  they  become  more  efficient  and  more 
productive;  or  because  they  are  constantly  reducing  the  amount  of 
labor  and  time — that  is  the  social  cost — of  production.  We  are  not 
beaten  by  the  incompetence  and  waste  of  our  rivals,  but  by  the 
incompetence  and  waste  that  we  ourselves  display  in  our  present 
industrial  organization.  What,  at  any  rate,  is  clear  to  the  economist 
is  that  a  Legal  Minimum  Wage  would  have  no  more  effect,  and  no 
different  an  effect,  on  our  international  trade  than  the  limitation 
of  the  hours  of  labor  and  the  enforcement  of  sanitary  conditions 
which  our  Factory  Acts  have  imposed;  and  no  educated  person  in 
Great  Britain  to-day — certainly  no  one  having  the  least  pretensions 
to  economic  knowledge — believes  that  our  Factory  Acts  have  been 
otherwise  than  beneficial  to  our  international  trade,  which  we  see 
increasing  by  leaps  and  bounds. 

I  pass  to  a  more  interesting  point.  What  would  be  the  result 
of  a  Legal  Minimum  Wage  on  the  employer’s  persistent  desire  to- 
use  boy  labor,  girl  labor,  married  women’s  labor,  the  labor  of  old 
men,  of  the  feeble-minded,  of  the  decrepit  and  broken-down  invalids 
and  all  the  other  alternatives  to  the  engagement  of  competent  male 
adult  workers  at  a  full  Standard  Rate?  What  would  be  the  effect, 
in  short,  upon  the  present  employment,  at  wages  far  below  a  decent 
level,  of  workers  who  at  present  cannot  (or  at  any  rate  do  not) 
obtain  a  full  subsistence  wage? 


14 


To  put  it  shortly,  all  such  labor  is  parasitic  on  other  classes  of 
the  community,  and  is  at  present  employed  in  this  way  only  because 
it  is  parasitic. 

When  an  employer,  without  imparting  any  adequate  instruc¬ 
tion  in  a  skilled  craft,  gets  his  work  done  by  boys  and  girls  who  live 
with  their  parents  and  work  practically  for  pocket  money,  he  is 
clearly  receiving  a  subsidy  or  bounty,  which  gives  his  process  an 
economic  advantage  over  those  worked  by  fully  paid  labor.  But 
this  is  not  all.  Even  if  he  pays  the  boys  or  girls  a  wage  sufficient 
to  cover  the  cost  of  their  food,  clothing,  and  lodging  so  long  as 
they  are  in  their  teens,  and  dismisses  them  as  soon  as  they  become 
adults,  he  is  in  the  same  case.  For  the  cost  of  boys  and  girls  to 
the  community  includes  not  only  their  daily  bread  between  thirteen 
and  twenty-one,  but  also  their  nurture  from  birth  to  the  age  of 
beginning  work,  and  their  maintenance  as  adult  citizens  and  parents. 
If  a  trade  is  carried  on  entirely  by  the  labor  of  boys  and  girls,  and 
is  supplied  with  successive  relays  who  are  dismissed  as  soon  as 
as  they  become  adults,  the  mere  fact  that  the  employers  pay  what 
seems  a  subsistence  wage  to  the  young  people  does  not  prevent 
the  trade  from  being  economically  parasitic.  The  employer  of 
adult  women  is  in  the  same  case,  where,  as  is  usual,  he  pays  them 
a  wage  insufficient  to  keep  them  in  full  efficiency,  irrespective  of 
what  they  receive  from  their  parents,  husbands,  or  lovers.  In 
all  these  instances  the  efficiency  of  the  services  rendered  by  the 
young  persons  or  women  is  being  kept  up  out  of  the  earnings  of 
some  other  class.  These  trades  are  therefore  as  clearly  receiving  a 
subsidy  as  if  the  workers  in  them  were  being  given  a  “rate  in  aid  of 
wages.”  The  employer  of  partially  subsidized  woman  or  child 
labor  gains  actually  a  double  advantage  over  the  self-supporting 
trades;  he  gets,  without  cost  to  himself,  the  extra  energy  due  to 
the  extra  food  for  which  his  wages  do  not  pay,  and  he  abstracts — 
possibly  from  the  workers  at  a  rival  process,  or  in  a  competing 
industry — some  of  the  income  which  might  have  increased  the 
energy  put  into  the  other  trade. 

But  there  is  a  far  more  vicious  form  of  parasitism  than  this 
partial  maintenance  by  another  class.  The  continued  efficiency 
of  a  nation’s  industry  obviously  depends  on  the  continuance  of  its 
citizens  in  health  and  strength.  For  an  industry  to  be  economi¬ 
cally  self-supporting,  it  must,  therefore,  maintain  its  full  establish¬ 
ment  of  workers,  unimpaired  in  numbers  and  vigor,  with  a  sufficient 
number  of  children  to  fill  all  vacancies  caused  by  death  or  super- 


15 


animation.  If  the  employers  in  a  particular  trade  are  able  to  take 
such  advantage  of  the  necessities  of  their  workpeople  as  to  hire 
them  for  wages  actually  insufficient  to  provide  enough  food,  cloth¬ 
ing  and  shelter  to  maintain  them  permanently  in  average  health; 
if  they  are  able  to  work  them  for  hours  so  long  as  to  deprive  them  of 
adequate  rest  and  recreation;  or  if  they  can  subject  them  to  con¬ 
ditions  so  dangerous  or.  insanitary  as  positively  to  shorten  their 
lives,  that  trade  is  clearly  obtaining  a  supply  of  labor  force  which 
it  does  not  pay  for.  If  the  workers  thus  used  up  were  horses — as, 
for  instance,  on  the  horse-cars  of  an  old  street  railroad,  or  like  those 
that  the  English  stagecoaches  formerly  “used  up”  in  three 
years’  galloping — the  employers  would  have  to  provide,  in  addition 
to  the  daily  modicum  of  food,  shelter,  and  rest,  the  whole  cost  of 
breeding  and  training  the  successive  relays  necessary  to  keep  up 
their  establishments.  In  the  case  of  free  human  beings,  who  are 
not  purchased  by  the  employer,  this  capital  value  of  the  new  genera¬ 
tion  of  workers  is  placed  gratuitously  at  his  disposal,  on  payment 
merely  of  subsistence  from  day  to  day.  Such  parasitic  trades  are 
not  drawing  any  money  subsidy  from  the  incomes  of  other  classes. 
But  in  thus  deteriorating  the  physique,  intelligence,  and  character 
of  their  operatives,  they  are  drawing  on  the  capital  stock  of  the 
nation.  And  even  if  the  using  up  is  not  actually  so  rapid  as  to 
prevent  the  “sweated”  workers  from  producing  a  new  generation 
to  replace  them,  the  trade  is  none  the  less  parasitic.  In  persistently 
deteriorating  the  stock  it  employs  it  is  subtly  draining  away  the 
vital  energy  of  the  community.  It  is  taking  from  these  workers, 
week  by  week,  more  than  its  wages  can  restore  to  them.  A  whole 
community  might  conceivably  thus  become  parasitic  on  itself, 
or,  rather  upon  its  future.  If  we  imagine  all  the  employers  in  all 
the  industries  of  the  nation  to  be,  in  this  sense,  “sweating”  their 
labor,  the  entire  nation  would,  generation  by  generation,  steadily 
degrade  in  character  and  industrial  efficiency.  And  in  human 
society,  as  in  the  animal  world,  the  lower  type  developed  by  para¬ 
sitism,  characterized  as  it  is  by  the  possession  of  smaller  faculties 
and  fewer  desires,  does  not  necessarily  tend  to  be  eliminated  by 
free  competition.  The  degenerate  forms  may,  on  the  contrarjq 
flourish  in  their  degradation,  and  depart  farther  and  farther  from 
the  higher  type.  Evolution,  in  a  word,  if  unchecked  by  man’s 
selective  power,  may  result  in  degeneration  as  well  as  in  what  we 
choose  to  call  progress.  It  is  to  prevent  this  result  that  every 
civilized  nation  has  been  driven,  by  a  whole  century  of  experiment, 


16 


to  the  adoption  of  stringent  factory  legislation  as  regards  sanitation 
and  hours  of  labor.  But  water-closets  and  leisure  do  not,  of  them¬ 
selves,  maintain  the  nation’s  workers  in  health  and  efficiency,  or 
prevent  industrial  parasitism.  Just  as  it  is  against  public  policy 
to  allow  an  employer  to  engage  a  woman  to  work  excessive  hours  or 
under  insanitary  conditions,  so  it  is  equally  against  public  policy 
to  permit  him  to  engage  her  for  wages  insufficient  to  provide  the 
food  and  shelter  without  which  she  cannot  continue  in  health. 
Once  we  begin  to  prescribe  the  minimum  conditions  under  which  an 
employer  should  be  permitted  to  open  a  factory,  there  is  no  logical 
distinction  to  be  drawn  between  the  several  clauses  of  the  wage- 
contract.  From  the  point  of  view  of  the  employer,  one  way  of 
increasing  his  expenses  is  the  same  as  another,  while  to  the  econo¬ 
mist  and  the  statesman,  concerned  with  the  permanent  efficiency 
of  industry  and  the  maintenance  of  national  health,  adequate  food 
is  at  least  as  important  as  reasonable  hours  or  good  drainage.  To 
be  completely  effectual  the  same  policy  will,  therefore,  have  to 
be  applied  to  wages.  Thus,  to  the  economist,  the  enforcement  of  a 
Legal  Minimum  Wage  appears  but  as  the  latest  of  the  long  series 
of  Common  Rules,  which  experience  has  proved  to  be  (a)  neces¬ 
sary  to  prevent  national  degradation;  and  (6)  positively  advan¬ 
tageous  to  industrial  efficiency. 

Does  this  mean  that  the  enforcement  of  a  Legal  Minimum 
Wage  in  any  sweated  industry  will  involve  the  destruction  of  that 
industry?  By  no  means. 

When  any  particular  way  of  carrying  on  an  industry  is  favored 
by  a  bounty  or  subsidy,  this  way  will  almost  certainly  be  chosen,  to 
the  exclusion  of  other  methods  of  conducting  the  business.  If  the 
subsidy  is  withdrawn,  it  often  happens  that  the  industry  falls  back 
on  another  process,  which,  less  immediately  profitable  to  the 
capitalists  than  the  bounty-fed  method,  proves  positively  more 
advantageous  to  the  industry  in  the  long  run.  This  result,  familiar 
to  the  Free  Trader,  is  even  more  probable  when  the  bounty  or  sub¬ 
sidy  take  the  form,  not  of  a  protective  tariff,  an  exemption  from 
taxation,  or  a  direct  money  grant,  but  of  the  privilege  of  exacting 
from  the  manual  workers  more  labor-force  than  is  replaced  by  the 
wages  and  other  conditions  of  employment.  The  existence  of 
Negro  slavery  in  the  Southern  States  of  America  made,  while  it 
lasted,  any  other  method  of  carrying  on  industry  economically 
impossible;  but  it  was  not  really  an  economic  advantage  to  cotton¬ 
growing.  The  “white  slavery”  of  the  early  factory  system  of 


17 


Lancashire  a  century  ago  stood,  so  long  as  it  was  permitted,  in  the 
way  of  any  manufacturer  adopting  more  humane  conditions  of 
employment;  but  when  these  more  humane  conditions  were  forced 
upon  the  Lancashire  mill-owners,  they  were  discovered  to  be  more 
profitable  than  those  which  unlimited  freedom  of  competition  had 
dictated.  The  low  wages  to  which,  in  the  unregulated  trades,  the 
stream  of  competitive  pressure  forces  employers  and  operatives 
alike,  are  not  in  themselves  any  more  economically  advantageous 
to  the  industry  than  the  long  hours  and  the  absence  of  sanitary 
precautions  were  to  the  early  cotton  mills  of  Lancashire.  To  put 
it  plumply,  if  the  employers  paid  more,  the  labor  would  be  worth 
more./fn  so  far  as  this  proves  to  be  the  case,  the  legal  minimum 
wage  would  have  raised  the  Standard  of  Life  without  loss  of  trade, 
without  cost  to  the  employer,  and  without  disadvantage  to  the 
community!  Moreover,  the  mere  fact  that  employers  are  at  present 
paying  lotm*  wages  than  the  proposed  minimum  is  no  proof  that 
the  labor  is  not  “worth”  more  to  them  and  to  the  customers;  for 
the  wages  of  the  lowest  grade  of  labor  are  fixed,  not  by  the  “worth,” 
in  any  sense — not  even  the  possible  “value  in  exchange” — of  the 
individual  laborer,  but  (as  we  must  nowadays  sadly  concede)  largely 
by  the  urgent  necessities  of  the  “marginal”  man,  or,  rather,  the 
“marginal”  woman.  It  may  well  be  that,  rather  than  go  without 
the  particular  commodity  produced,  the  community  would  will¬ 
ingly  pay  much  more  for  it,  and  yet  consume  as  much  or  nearly 
as  much  of  it,  as  it  now  does.  Nevertheless,  so  long  as  the  wage 
earner  can  be  squeezed  down  to  a  subsistence  wage,  or,  more  cor¬ 
rectly,  a  parasitic  wage,  the  pressure  of  competition  will  compel 
the  employer  so  to  squeeze  him,  whether  the  consumer  desires  it 
or  not. 

The  question  then  arises  what  effect  the  prohibition  of  para¬ 
sitism  would  have  on  the  individuals  at  present  working  in  the 
sweated  trades.  We  need  not  dwell  on  the  individual  personal 
hardships  incidental  to  any  shifting  of  industry  or  change  of  process. 
Any  deliberate  improvement  in  the  distribution  of  the  nation’s 
industry  ought,  out  of  regard  for  these  hardships,  to  be  brought 
about  gradually,  and  with  equitable  consideration  of  the  persons 
injuriously  affected.  But  there  is  no  need  to  assume  that  anything 
like  all  those  now  receiving  less  than  the  Legal  Minimum  Wage 
would  be  displaced  by  its  enactment. 

We  see,  in  the  first  place,  that  the  very  leveling  up  of  the  stand¬ 
ard  conditions  of  sanitation,  hours,  and  wages  would,  in  some  direc- 


18 


tions,  positively  increase  the  demand  for  labor.  The  contraction 
of  the  employment  of  boys  and  girls,  brought  about  by  the  needful 
raising  of  the  age  for  full  and  half-time,  respectively,  would,  in 
itself,  increase  the  number  of  situations  to  be  filled  by  adults.  The 
enforcement  of  the  normal  day,  by  stopping  the  excessive  hours 
of  labor  now  worked  by  the  most  necessitous  operatives,  and  the 
overtime  resorted  to  whenever  it  suits  the  momentary  convenience 
of  each  particular  employer — quite  irrespective  of  whether  the 
community  as  a  whole  is  in  a  hurry,  or  not — would  automatically 
absorb  the  best  of  the  unemployed  workers  in  their  own  and  allied 
occupations,  and  would  create  a  new  demand  for  learners.  Finally, 
the  abandonment  of  that  irregularity  of  employment  which  so 
disastrously  affects  the  New  York  outworkers  and  the  London 
dock-laborers,  and  indeed  most  other  occupations,  would  result  in  the 
enrolment  of  a  new  permanent  staff.  All  these  changes  would 
bring  into  regular  work,  at  or  above  the  Legal  Minimum,  whole 
classes  of  operatives,  selected  from  among  those  now  only  partially 
or  fitfully  employed.  Thus,  all  the  most  capable  and  best  con¬ 
ducted  would  certainly  obtain  regular  situations.  But  this  con¬ 
centration  of  employment  would,  it  must  be  admitted,  imply  the 
total  exclusion  of  others,  who  might,  in  the  absence  of  regulation, 
have  “picked  up”  some  sort  of  partial  livelihood.  In  so  far  as  the 
persons  thus  rendered  permanently  unemployed  consisted  merely  of 
children  removed  from  industrial  work  to  the  schoolroom,  few 
(and  certainly  no  economist)  would  doubt  that  the  change  would 
be  wholly  advantageous  to  national  productivity  and  economic 
efficiency.  And  there  are  many  who  would  welcome  a  reorganiza¬ 
tion  of  industry,  which,  by  concentrating  employment  exclusively 
among  those  in  regular  attendance,  would  tend  automatically  to 
exclude  from  wage-labor,  and  to  set  free  for  domestic  duties,  an 
ever-increasing  proportion  of  the  women  having  young  children 
to  attend  to.  There  would  still  remain  to  be  considered  the  rem¬ 
nant,  who,  notwithstanding  the  increased  demand  for  adult  male 
labor  and  independent  female  labor,  proved  to  be  incapable  of 
earning  the  Legal  Minimum  in  any  capacity  whatsoever.  We 
should,  in  fact,  be  brought  face  to  face  with  the  problem,  not  of 
the  unemployed  but  of  the  unemployable;  those  whom  no  employer 
would  employ  at  the  Legal  Minimum  even  if  trade  was  booming 
and  he  could  get  nobody  else. 

The  unemployable,  to  put  it  bluntly,  do  not  and  cannot  under 
any  circumstances  earn  their  keep.  What  we  have  to  do  with 


19 


them  is  to  see  that  as  few  as  possible  of  them  are  produced;  that 
such  of  them  as  can  be  cured  are  (almost  at  whatever  cost)  treated 
so  as  promptly  to  remove  their  incapacity,  and  that  the  remnant 
are  provided  for  at  the  public  expense,  as  wisely,  humanely,  and 
inexpensively  as  possible. 

I  cannot  here  enter  into  the  appropriate  social  regimen  and 
curative  treatment  best  calculated  to  minimize  the  production  of 
the  unemployable  in  each  subdivision,  and  to  expedite  the  recovery 
of  such  as  are  produced.  Such  a  regimen  and  such  a  treatment  have 
been  elaborately  expounded  for  the  United  Kingdom  in  the  Minor¬ 
ity  Report  of  the  Poor  Law  Commission,  which  is,  in  my  judgment, 
essentially  applicable  to  the  United  States  in  much  the  same  way  as 
to  the  United  Kingdom.  Once  such  unfortunate  products  of  social 
anarchy  exist,  these  physical  and  moral  weaklings  and  degenerates 
must  somehow  be  maintained,  at  the  expense  of  other  persons. 
They  may  be  provided  for  from  their  own  property  or  savings,  by 
charity,  or  from  public  funds,  with  or  without  being  set  to  work 
in  whatever  ways  are  within  their  capacity.  But,  of  all  ways  of 
dealing  with  these  unfortunate  parasites,  the  most  ruinous  to  the 
community  is  to  allow  them  unrestrainedly  to  compete  as  wage 
earners  for  situations.  For  this  at  once  prevents  competition  from 
resulting  in  the  selection  of  the  most  fit,  and  thus  defeats  its  very 
object.  In  the  absence  of  any  Common  Rule,  it  will,  as  we  have 
seen,  often  “pay”  an  employer  to  select  a  physical  or  moral  invalid, 
who  offers  his  services  for  a  parasitic  wage,  rather  than  the  most 
efficient  workman,  who  stands  out  for  the  conditions  necessary 
for  the  maintenance  of  his  efficiency.  In  the  same  way  a  whole 
industry  may,  if  permitted,  batten  on  parasitic  labor,  diverting 
the  nation’s  capital  and  brains  from  more  productive  processes,  and 
undermining  the  position  of  its  more  capable  artisans.  And  where 
the  industrial  parasitism  takes  the  form  of  irregular  employment, 
as,  for  instance,  among  the  sweated  outworkers  or  homeworkers 
in  all  great  cities,  and  the  casual  dock-laborers,  its  effect  is  actually 
to  extend  the  area  of  the  disease.  The  consumers’  demand — which 
governs  the  employers’  requirements — would  suffice  to  keep*  in 
regular  work,  at  something  like  adequate  weekly  earnings,  a  cer¬ 
tain  proportion  of  these  casual  workers.  But  because  it  is  dis¬ 
tributed,  as  partial  employment  and  partial  maintenance,  among 
the  entire  class,  its  insufficiency  and  irregularity  demoralize  all 
alike,  and  render  whole  sections  of  the  population  of  the  great  cities 
of  the  twentieth  century  permanently  incapable  of  regular  con- 


20 


duct  and  continuous  work.  Thus,  the  disease  perpetuates  itself, 
and  becomes  by  its  very  vastness  incapable  of  being  isolated  and 
properly  treated.  A  dim  appreciation  of  the  evil  effects  of  any 
mixing  of  degenerates  in  daily  life,  joined,  of  course,  with  motives 
of  humanity,  has  caused  the  sick  and  the  infirm,  the  imbeciles  and 
the  lunatics,  even  the  cripples  and  the  epileptics,  to  be,  in  all  civil¬ 
ized  communities,  increasingly  removed  from  the  competitive 
labor  market,  and  scientifically  dealt  with  according  to  their  capaci¬ 
ties  and  their  needs.  The  “labor  colonies”  of  Holland  and  Germany 
are,  from  this  point  of  view,  an  extension  of  the  same  policy.  To 
maintain  our  industrial  invalids,  even  in  idleness,  from  public  funds, 
involves  a  definite  and  known  burden  on  the  community.  To 
allow  them  to  remain  at  large,  in  parasitic  competition  with  those 
who  are  whole,  is  to  contaminate  the  labor  market;  and  means  a 
disastrous  lowering  of  the  standard  of  life  and  standard  of  conduct, 
not  for  them  alone,  but  for  the  entire  wage-earning  class. 

The  economist  has,  therefore,  to  point  out  to  the  statesman  that 
the  adoption  of  a  Legal  Minimum  Wage  would  in  no  way  increase 
the  amount  of  maintenance  which  has  to  be  provided  by  the  com¬ 
munity,  in  one  form  or  another,  for  persons  incapable  of  producing 
their  own  keep.  It  would,  on  the  contrary,  tend  steadily  to  reduce 
it,  both  by  diminishing  the  number  of  weaklings  or  degenerates 
annually  produced,  and  by  definitely  marking  out  such  as  exist, 
so  that  they  may  be  isolated  and  properly  treated. 

There  remains  the  question  for  the  economist  of  the  manner  in 
which  a  Legal  Minimum  Wage  can  be  best  determined  and  enforced. 
The  object  being  to  secure  the  community  against  the  evils  of  indus¬ 
trial  parasitism,  the  minimum  wage  for  a  man  or  a  woman,  respec¬ 
tively  ought  theoretically  to  be  determined  by  practical  inquiry 
as  to  the  cost  of  the  food,  clothing,  and  shelter  physiologically 
necessary,  according  to  national  habit  and  custom,  to  prevent 
bodily  and  mental  deteriorations.  Such  a  minimum  would,  there¬ 
fore,  be  low,  and  though  its  establishment  would  be  welcomed  as 
a  boon  by  the  unskilled  workers  in  the  unregulated  trades,  it  would 
not  at  all  correspond  with  the  conception  of  a  “living  wage”  formed 
by  the  cotton  operatives  or  the  coal  miners.  Practically,  in  all 
but  the  lowest  paid  trades,  chiefly  for  women  workers,  it  must  in 
practice  be  left  to  the  wage  earners  to  settle  the  Standard  Rate 
and  other  conditions  of  employment,  by  Collective  Bargaining. 

This  does  not  exclude — and  experience  shows,  indeed,  that  it 
may  lead  up  to — the  ultimate  fixing  of  a  Minimum  by  a  Joint  Board 


21 


representing  the  employers  and  operatives  of  the  whole  trade; 
and  (as  now  in  a  hundred  different  trades  in  Victoria)  the  giving 
of  statutory  authority  to  the  Minimum  so  determined,  which  is 
then  enforced  as  part  of  the  Factory  Law.  What  happens,  in 
effect,  is  that  the  rates  or  conditions  current  in  the  best  establish¬ 
ments  are,  at  the  outset,  taken  as  the  standard,  and  made  appli¬ 
cable,  with  any  necessary  adjustments,  to  all  establishments.  From 
this  basis,  advances  and  reductions  (though  there  are  seldom  reduc¬ 
tions)  are  reckoned,  claimed,  and  argued  for  in  the  usual  way. 

To  those  not  practically  acquainted  with  the  organization  of 
industry  and  Government  administration  in  countries  of  advanced 
development  (and  I  fear  that  many  economists  are  in  this  position, 
in  the  United  States  as  in  Europe)  the  idea  of  a  compulsorily  enforced 
Minimum  Wage  may  seem  impracticable./  Of  course,  there  will 
still  be  people  up  and  down  the  country  who  will  go  on  saying  that 
that  it  is  “impossible” — while  it  is  in  actual  operation,  not  only 
in  Australia  and  New  Zealand  and  the  United  Kingdom,  but  under 
their  own  eyes!  As  a  matter  of  fact,  the  authoritative  settlement 
of  a  minimum  wage  is  already  undertaken  daily.  Every  munici¬ 
pal  authority  throughout  the  country  has  to  decide,  under  the 
criticism  of  public  opinion,  what  wage  it  will  pay  to  its  lowest  grade 
of  laborers.  It  can  hire  them  at  any  price,  even  at  twenty-five 
cents  a  day;  but  it  must  be  rare  that  any  such  genuinely  “com¬ 
petitive”  wage  is  paid.  What  happens  in  practice  is  that  the  officer 
in  charge  fixes  such  a  wage  as  he  believes  he  can  permanently  get 
good  enough  work  for.  In  the  same  way,  the  National  Govern¬ 
ment  of  the  United  Kingdom,  which  is  by  far  the  largest  employer 
of  labor  in  the  country,  does  not  take  the  cheapest  laborers  it  can 
get,  at  the  lowest  price  at  which  they  will  offer  themselves,  but 
deliberately  settles  its  own  minimum  wage  for  each  department. 
During  the  last  few  years  this  systematic  determination  of  the  rate 
to  be  paid  for  Government  labor,  which  must  have  existed  from  the 
days  of  Pepys,  has  been  more  and  more  consciously  based  upon 
what  we  have  called  the  doctrine  of  a  living  wage.  Thus,  the 
Admiralty  is  now  constantly  taking  evidence,  either  through  the 
Labor  Department  or  through  its  own  officials,  as  to  the  cost  of 
living  in  different  localities,  so  as  to  adjust  its  laborers’  wages  to 
the  expense  of  their  subsistence.  The  General  Post-Office  has  just 
been  doing  the  same  thing  on  a  very  elaborate  scale.  And  in  our 
English  local  governing  bodies,  which  employ,  in  the  aggregate, 
more  operatives  than  almost  any  single  industry,  we  see  the  com- 


22 


mittees,  under  the  pressure  of  public  opinion,  every  day  substi¬ 
tuting  a  deliberately  settled  minimum  for  the  haphazard  decisions 
of  the  officials  of  the  several  departments.  What  is  not  so  generally 
recognized  is  that  exactly  the  same  change  is  taking  place  in  private 
enterprise.  The  great  captains  of  industry,  interested  in  the  per- 
mament  efficiency  of  their  establishments,  have  long  adopted  the 
practice  of  deliberately  fixing  the  minimum  wage  to  be  paid  to  the 
lowest  class  of  unskilled  laborers,  according  to  their  own  view  of 
what  the  laborers  can  live  on,  instead  of  letting  out  their  work  to 
subcontractors,  whose  only  object  is  to  exact  the  utmost  exertion 
for  the  lowest  price.  A  railroad  never  dreams  of  putting  its  situa¬ 
tions  up  to  tender,  and  engaging  the  man  who  offers  to  come  at  the 
lowest  wage;  what  happens  is  that  the  rate  of  pay  of  trainmen 
and  roadmen  is  deliberately  fixed  in  advance.  And,  so  far  as  the 
United  Kingdom  is  concerned,  it  is  a  marked  feature  of  the  last 
ten  years  that  the  settlement  of  this  minimum  has  been,  in  some  of 
the  greatest  industries,  taken  out  of  the  hands  of  the  individual 
employer,  and  arrived  at  by  a  Joint  Board,  or  even  by  an  arbitrator. 
The  assumption  that  the  wages  of  the  lowest  grade  of  labor  must, 
at  any  rate,  be  enough  to  maintain  the  laborer  in  industrial  efficiency 
is,  in  fact,  accepted  by  all  parties,  so  that  the  task  of  the  arbitrator 
in  such  a  case  is  comparatively  easy.  Lord  James  of  Hereford, 
for  instance,  a  few  years  ago,  fixed,  with  universal  acceptance,  a 
minimum  wage  for  all  the  lowlier  grades  of  labor  employed  by  the 
North  Eastern  Railway  Company.  Indeed,  the  fixing  of  a  minimum 
wage  on  physiological  grounds  is  a  less  complicated  matter.,  and  one 
demanding  less  technological  knowledge,  than  the  fixing  of  a  mini¬ 
mum  of  sanitation,  which  is  done  in  every  Factory  Law;  and  it 
interferes  far  less  with  the  day-by-day  management  of  industry 
or  its  productivity,  than  any  fixing  of  the  maximum  hours  of  labor, 
whether  of  men  or  women,  to  which,  wherever  excessive  hours 
prevail,  the  European  economist  is  now  converted.  To  put  it  con¬ 
cretely,  if  the  president  of  any  great  textile  corporation  could  for 
a  moment  rid  himself  of  a  sort  of  metaphysical  horror  of  any  legal 
regulation  of  wages,  he  would  admit  that  the  elaborate  Factory 
Law  requirements  in  the  way  of  sanitation  and  safety,  and  any 
limitation  in  the  hours  of  labor,  constituted  a  far  greater  impedi¬ 
ment  to  the  management  of  his  “own  business,”  in  the  way  he 
thinks  best,  than  would  any  legal  Minimum  of  Wages  for  the  low¬ 
est  grades  of  labor.  As  a  matter  of  fact,  what  would  happen  would 
be  the  adoption,  as  the  Legal  Minimum,  of  the  wage  actually  paid 


23 


by  the  better  establishments,  who  would  be  affected  only  to  the 
extent  of  finding  their  competitors  put  on  the  same  level  as 
jEemselves. 

On  all  counts,  therefore,  the  modern  economist  must  conclude 
that  the  enforcement,  throughout  each  particular  trade,  of  a  Legal 
^Minimum  of  Wages  would,  like  the  analogous  enforcement  of  Com- 
►mon  Rules  as  to  hours  and  sanitation  by  the  Factory  Law,  be 
calculated  to  have  good,  and  not  bad,  economic  results  on  the 
.community  as  a  whole. 

The  urgently  needed  step  to  which  the  recent  developments 
in  the  industrial  world  point,  is,  to  my  mind,  a  wise  and  prudent 
use  of  Legal  Regulation  of  the  Conditions  of  Employment.  To  the 
public  (and  for  the  moment  perhaps  also  to  the  employer)  this  is 
summed  up  in  the  Legal  Minimum  Wage;  and  great  are  still  the 
apprehensions  aroused  thereby.  Yet  all  that  Factory  Legislation 
prescribes,  and  all  that  a  Minimum  Wage  Law  enacts,  is  that,  while 
employers  and  workmen  are  left  quite  free  to  work  or  not,  as  they 
choose,  and  quite  free  to  bargain  for  what  terms  they  will,  the  law 
prescribes  that  there  shall  be  a  minimum,  to  be  fixed,  under  public 
control,  by  representative  bodies  for  the  several  trades,  below  which, 
so  long  as  he  is  employed  at  all  and  properly  diligent  in  his  work, 
the  workman’s  subsistence  shall  not  descend.  This  is,  after  all, 
only  one  additional  example  of  the  century-old  Factory  Legis¬ 
lation.  We  have,  in  fact,  for  a  whole  century  been  prescribing 
by  law  the  Minimum  Conditions  of  the  Wage-Contract,  with  regard 
to  one  item  after  another;  and  thus  regulating,  in  the  public  inter¬ 
est,  by  a  hundred  successive  statutes,  the  conditions  under  which 
industry  shall  be  carried  on.  And  everybody  admits  this  legis¬ 
lation  to  have  been  eminently  successful  in  its  results.  Not  even 
the  most  reactionary  member  of  any  Legislature  throughout  the 
civilized  world  ever  offers  a  Bill  for  its  repeal.  And  the  scope  of 
the  legislation  has  steadily  broadened.  For  a  long  time  Factory 
Laws  confined  themselves  in  the  main  to  the  enactment  of  a  Legal 
Minimum  of  Sanitation  and  Safety  in  the  workshop  and  the  mine; 
insisting,  for  instance,  that,  whether  or  not  profits  were  being 
realized,  employers  should  provide  healthful  workplaces,  properly 
warmed  and  ventilated,  free  from  noxious  effluvia,  sufficiently 
protected  against  accidents,  and  adequately  equipped  with  sanitary 
conveniences.  From  that,  the  code  of  every  civilized  nation  has 
gone  on  to  prescribe  for  all  boys  and  girls  a  Legal  Minimum  of 
Education,  requiring  parents  and  employers  to  forego  the  help  in 


24 


industry  of  children  below  a  certain  age,  insisting  that  such  children 
should  be  in  attendance  at  school,  and  gradually  enlarging  the 
sphere  of  the  education  authority  so  as  to  ensure  that  no  child 
remains  below  the  prescribed  National  Minimum  of  Nurture  in  any 
respect  whatever.  Meanwhile  this  Labor  Code  has  been  laying 
down  also  a  Legal  Minimum  of  Leisure  and  Rest,  by  prescribing 
a  maximum  working  day;  insisting  on  proper  intervals  for  meal¬ 
times  and  holidays,  limiting  overtime,  etc.  All  these  successive 
interferences  with  the  employer’s  “right”  to  “manage  his  business 
in  his  own  way”  were  resisted  in  one  country  after  another,  by 
economists  as  well  as  by  “business  men,”  on  the  ground  that  they 
involved  additional  expense,  and  thereby  increased  the  cost  of  pro¬ 
duction,  just  as  much  as  if  the  rate  of  wages  had  been  arbitrarily 
raised;  and  that  they  thus  in  turn  made  it  impossible  for  the  most 
hardly  pressed  business  to  be  carried  on.  That  they  amounted 
virtually  to  a  confiscation  of  property  was  repeatedly  asserted.  It 
was,  as  an  eminent  Conservative  Minister  declared  in  the  British 
House  of  Commons,  “Jack  Cade  Legislation,”  which  robbed  the 
capitalist  of  some  of  his  income  for  the  assumed  benefit  of  his  work¬ 
people.  It  was  according  nothing  more  in  the  way  of  Jack  Cade 
Legislation  than  that  to  which  the  world  had  long  grown  accus¬ 
tomed,  when  the  Legislature  of  Victoria,  in  1896,  added  to  the 
various  minima  already  required  by  its  Factory  Code,  a  Legal 
Minimum  Wage.  This  was  adopted  for  the  United  Kingdom,  so 
far  as  regards  four  selected  trades,  in  the  Trade  Boards  Act  of  1909; 
and  it  is  significant  that  the  Legal  Minimum  Wage  was  then  carried, 
both  in  the  House  of  Commons  and  in  the  House  of  Lords,  with 
scarcely  a  dissentient  voice.  Three  years  afterward  the  same  thing 
was  done  for  the  coal  trade,  though  by  a  law  so  incompetently  or 
so  disingenuously  drafted  as  to  be  far  inferior  to  the  Trade  Boards 
Act.  It  is  true  that,  for  a  long  time,  each  successive  Factory  Act 
and  Mines  Regulation  Act  was  looked  upon  as  an  exceptional  out¬ 
come  of  our  special  pity  for  the  sufferings  of  some  particularly  weak 
and  ill-treated  class  of  wage  earners — at  first  the  parish  apprentices; 
then  the  children  and  young  persons  deprived  of  their  playtime; 
then  the  women  bound  all  day  to  the  steam-driven  loom,  amid 
the  noise  and  heat  and  dust  of  the  mill;  then  the  poor  miners 
imprisoned  in  the  bowels  of  the  earth;  then  the  down-trodden 
shop  assistant,  and  so  on.  But  though  the  sentimental  public 
and  the  merely  empirical  legislator  still  takes  this  view,  every  econo¬ 
mist,  and  indeed  every  educated  statesman,  knows  that  we  have 


25 


long  since  passed  beyond  that  point.  It  is  now  seen  that,  in  carry¬ 
ing  his  successive  Factory  Acts,  for  one  class  after  another,  laying 
down  a  Legal  Minimum  for  one  condition  after  another  of  the  wage- 
contract,  Lord  Shaftesbury,  like  the  Trade  Unionists  whom  he 
feared,  was  “building  better  than  he  knew.”  What  was  at  first 
empirical  has  become  scientific.  “And  so  the  Factory  Acts,”  to 
use  the  words  of  the  late  Duke  of  Argyll,  uttered  as  long  ago  as 
1867,  “instead  of  being  excused  as  exceptional,  and  pleaded  for  as 
justified  only  under  extraordinary  conditions,  ought  to  be  recog¬ 
nized  as  in  truth  the  first  legislative  recognition  of  a  great  Natural 
Law  ....  destined  to  claim  for  itself  wider  and  wider 
application.” 

What  the  Duke  of  Argyll  predicted  nearly  half  a  century  ago 
can  now  be  seen  to  be  imminent.  We  may  expect  to  find  all  the 
conditions  of  employment — wages  not  excluded — one  by  one  author¬ 
itatively  upheld  by  definite  Legal  Minima,  not  in  this  or  that  trade 
only,  but  in  every  industry;  not  in  this  or  that  country  alone,  but 
gradually  throughout  the  civilized  world. 


University  of  London 


Sidney  Webb 


2  061962244 


NATIONAL  CONSUMERS'  LEAGUE 

106  East  19th  Street,  New  York  City 
OiFIC^RS 

President,  Mr.  John  Graham  Brooks,  Cambridge,  Mass. 
Vice-Presidents,  Mrs.  Frederick  Nathan,  New  York  City 
Miss  Jane  Addams,  Chicago,  Ill. 

Mrs.  M.  R.  Trumbull,  Portland,  Ore. 

Miss  Myrta  L.  Jones,  Cleveland,  Ohio 
Mrs.  B.  C.  Gudden,  Oshkosh,  Wis. 

Mrs.  R.  P.  Halleck,  Louisville,  Ky. 

Mrs.  Samuel  S.  Fels,  Philadelphia,  Pa. 

Mrs.  Isham  Henderson,  New  Haven,  Conn. 
Treasurer,  Mr.  G.  Hermann  Kinnicutt,  New  York  City 
Recording  Secretary,  Mrs.  G.  W.  B.  Cushing,  East  Orange,  N.  J. 
General  Secretary,  Mrs.  Florence  Kelley,  New  York  City 
Publication  Secretary,  Miss  Josephine  Goldmark,  New  York  City 
Southern  Secretary,  Miss  Jean  Gordon,  New  Orleans,  La. 

Office  Secretary,  Miss  Sidney  Colestock,  New  York  City 

HONORARY  VICE-PRESIDENTS 

President  Arthur  T.  Hadley,  Yale  University 
Professor  Frank  W.  Taussig,  Harvard  University 
Professor  W.  J.  Ashley,  Birmingham,  England 
Professor  E.  R.  A.  Seligman,  Columbia  University 
Professor  J.  W.  Jenks,  New  York  University 
Professor  LI.  C.  Adams,  University  of  Michigan 
Professor  C.  R.  Llenderson,  University  of  Chicago 
Professor  S.  McC.  Lindsay,  Columbia  University 
Professor  R.  T.  Ely,  University  of  Wisconsin 
President  Mary  E.  Woolley,  Mt.  Holyoke  College 


Life  membership  fee . $1,000 

Sustaining  member .  25 

Associate  member .  5 

Individual  member .  1 


All  fees  and  contributions,  checks  and  money  orders,  should 
be  sent  to  the  Treasurer,  Mr.  G.  Hermann  Kinnicutt,  Room  804, 
106  East  19th  St.,  New  York  City. 


